Following a string of conversations, and a thoughtful reassessment, I have recently reduced the amount of planned retirement income. More on that shortly. First, some thoughts.
My experience has been that most families generally fall into one of four groups with respect to their financial planning. The first group simply has no understanding, and no real desire, to learn more regarding saving and investing for their future.
Often their focus in on living solely for the moment, certain that things will somehow work out in the future. Winning a lottery perhaps? Or maybe hitting it big in Las Vegas? The second group understands that they should be doing something, but are not sure where to start. That is exactly where I was in the early 2000s.
The third group is saving and investing something; however, they are doing it blindly and could not tell you why they chose their particular investment products, have no discernible way to tell if they are saving enough for retirement, and they do not know how much they will need to sustain them in retirement.
The fourth group has at least the broad outlines of a plan in place, has used some type of calculator to quantify how much they should be saving, and is actively engaged in managing their finances with an eye on the future.
If you currently belong to one of the first three groups, with no discernible plan, your financial life is not balanced. Those that fall into the fourth group have either found their balance or at a minimum, have put themselves in a position to achieve that balance.
In my retirement plan over the last few years, I have consistently adjusted the desired annual income up. The retirement income goal has gone from $125,000 to $150,000 to $200,000…
To be continued with Find Your Balance – Part II on Monday